Commercial Services“FSRU Toscana” Terminal

2018

COMMERCIAL SERVICES

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1 Introduction 4

1.1 Premises 4

1.2 “FSRU Toscana” 4

2 Terminalling model 6

3 Terminal services 7

3.1 Firm services 7

3.2 Interruptible services 8

3.3 Additional services 8

3.4 Maritime services 8

4 How to become a user 10

5 Capacity allocation 10

5.1 Allocation of continuous capacity at the beginning 11

of the gas year

5.2 Allocation of capacity products during the gas year 12

5.3 Allocation of capacity during the gas year 13

5.4 Capacity transactions 14

5.5 Capacity agreement and credit requirements 14

6 Regasification programme 15

6.1 Borrowing and lending principle 15

6.2 Redelivery profile flexibility 18

6.3 Operational obligations 20

7 Nominations and renominations 21

Summary

OLT FSRU Toscana

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COMMERCIAL SERVICES

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OLT FSRU Toscana

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OLT Offshore LNG Toscana S.p.A. (OLT) is the company that owns and operates the

floating regasification Terminal “FSRU Toscana”. OLT was set up by some of the major

industrial companies in the national and international energy sector, that hold the shares

of the company: IREN Group (49.07%), Uniper Global Commodities (48.24%) and Golar

LNG (2.69%).

The regasification services are provided under the terms and conditions stated in the

Regasification Code approved on March 1st, 2018 by Italian Regulatory Authority for

Energy, Networks and Environment (ARERA) with Resolution 110/2018/R/Gas.

The present document describes the regasification services offered by “FSRU Toscana”

Terminal outlining the access rules and the operating regime. In the event that changes

to the Regasification Code have an impact on this document, the latter will be amended

taking these changes into account.

Regasification Code and the relevant annexes, the regulated regasification tariffs and other

information about “FSRU Toscana” are available on our website: www.oltoffshore.it.

The floating storage and regasification unit named “FSRU Toscana” is in operation

since 2013. It is located 12 nautical miles offshore the coast between Livorno and Pisa,

with a single point of rotation at the bow in order to allow the ship to move around

the anchorage turret, so adapting to sea weather conditions. “FSRU Toscana” is then

connected to the shore by a 32” diameter pipeline built and operated by Snam Rete Gas

S.p.A. (Snam Rete Gas).

LNG handling system has been designed to receive the LNG from LNG carriers with a

transport capacity between 65,000 m3 and 180,000 m3 (“New Panamax” class, around

the 90% of the worldwide LNGc fleet) and to discharge the LNG at the maximum flow

rate equal to 12,000 m3/h. “FSRU Toscana” is equipped with four 16” LNG loading arms:

two LNG loading arms, one vapour loading arm and the fourth hybrid loading arm which

can be used both for LNG and for vapour if one of the aforementioned loading arms is

unavailable.

PREMISES

“FSRU Toscana”

1.1

1.2

1 Introduction

COMMERCIAL SERVICES

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The Terminal has four spherical Moss® LNG storage tanks. Each tank has a diameter of

approximately 40 meters. The net storage capacity is estimated to be about 135,000 m3.

On the “FSRU Toscana” three Tri-Ex Intermediate Fluid-Type vaporizers are installed

and used in the regasification process. The Terminal has been designed to handle a

minimum continuous LNG throughput of 10 tons/hour and a maximum throughput of

450 tons/hour, based on the nominal composition of the LNG, that means approximately

a send-out between 0.3 and 15 million Sm3/day of natural gas injected into the national

transportation grid. Two flexible risers connect the turret swivel of the FSRU with the

national transport grid owned and operated by Snam Rete Gas.

The maximum annual authorised regasification capacity of the Terminal is 3.75 billion Sm3

of natural gas.

Figure 1-1 “FSRU Toscana”

“FSRU Toscana” Terminal

Tower of Meloria

17 km (9 nm

)

TYRRHENIAN SEA

Livorno

Pisa

Collesalvetti

TUSCANY

22 km (12 nm)

OLT FSRU Toscana

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The whole terminalling process provides LNG transfer, LNG storage and regasification

as well as natural gas redelivery at the national transportation grid though the entry

point named “GNL OLT Livorno”.

2 Terminalling model

Figure 2-1 Terminalling model

Delivery Slot means the scheduled arrival window and the associated allowed LNG

Carrier lay-time allotted or to be allotted to each user following the determination of

an Annual Unloading Schedule as being the time during which the user’s LNG carrier

is scheduled to arrive at the pilot boarding station, transit to the Terminal, receive and

install the spool pieces, moor, unload, depart from the Terminal and transit two nautical

miles off from the Terminal itself.

Delivery Point means the Terminal flange located at the connection point between the

Terminal’s loading arms (and the spool pieces, in event they are used by LNG carrier)

and the LNG carrier’s manifolds.

User’s LNG means, subject to any in tank title transfer by the users, LNG which has been

delivered to the Terminal by or on behalf of the user.

User’s Inventory means the quantity of LNG and gas in the Terminal which is held by the

TYRRHENIAN SEA

Pisa

Collesalvetti

LivornoINVENTORY

DELIVERY POINT REDELIVERY POINT

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������������������������������

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TUSCANY

COMMERCIAL SERVICES

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Terminal on behalf of the users taking into consideration the start of the day inventory, the quantity of LNG

delivered and/or transferred, fuel gas consumption, any corrections thereof.

Redelivery Point is the gas pipeline flange located on the seabed after SSIV (Sub-Sea Isolation Valve)

station connecting the Terminal to the national transportation grid.

Wobbe Index correction system is the system that allows the delivery of the LNG that wouldn’t meet the

requirements of the national transport grid by means of nitrogen injection, producing up to 10,400 Sm³/hr

of nitrogen. The “Wobbe Index Corrector” module, in fact, allows LNG with a wide range of quality to be

received, with a Wobbe Index of between 13.13 kWh/Sm3 and 14.71 kWh/Sm3. Should the LNG arriving at

the Terminal have a Wobbe Index out of the above specifications, this LNG may, in any case, be accepted

if OLT deems it can be adjusted to meet the quality specifications issued by Snam Rete Gas.

The main firm services that the Terminal provides to the users are:

• number of berthing slots set forth in user’s Capacity Agreement to enable the user to moor the LNG carrier and deliver LNG at the “FSRU Toscana”;

• allowing mooring access alongside the “FSRU Toscana” to receive and unload LNG carriers;

• providing the “FSRU Toscana” crew hook the LNG carrier mooring lines to the “FSRU Toscana” hooks only;

• receipt of an unloaded cargo from an LNG carrier during a Delivery Slot;

• storage of the user’s LNG in the Terminal;

• providing continuous redelivery services;

• redelivery of natural gas to the Redelivery Point: such quantities will be made available to and taken in charge by Snam Rete Gas for the purpose of transportation service pursuant to Snam Rete Gas;

• providing nitrogen injection for correction of the Wobbe Index;

• metering, measurement and analysis of LNG and gas;

• availability of the mooring, tugs and pilot services to the user.

FIRM SERVICES3.1

3 Terminal services

OLT FSRU Toscana

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On each gas day OLT may make available to the users, on interruptible basis, any

unused firm redelivery services of any users and/or available capacity in excess of the

regasification capacity required to provide continuous redelivery services.

The user shall procure tug, mooring lines and pilots services to service each LNG

carrier by entering into contract with the tug, mooring lines and pilots service providers

nominated from time to time by OLT.

The additional services provided by the Terminal are:

• transfer of LNG in storage between users;

• exchange of regasification capacity between users;

• voluntary slot transfer;

• capacity slot release;

• nomination process;

• commercial data publication on OLT website;

• ship approval process;

• Electronic Communication System (ECS) through which each user can manage its commercial position.

INTERRUPTIBLE SERVICES

MARITIME SERVICES

ADDITIONAL SERVICES

3.2

3.4

3.3

COMMERCIAL SERVICES

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OLT FSRU Toscana

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5 Capacity allocation

Access to Terminal services is granted in an impartial manner and on equal terms to all

parties provided that they meet the service conditions.

The applicant shall:

If any user ceases to satisfy or maintain one or more of the services conditions, the user

shall notify OLT immediately after becoming aware of such event or circumstance.

4 How to become a user

Be a user of national transportation grid or otherwise shall specify one or more users of national transportation grid to whom the natural gas will be allocated.

Meet the required credit support and the user’s insurance.

Comply with all the applicable laws concerning the exercise of its rights, the fulfilment of its obligations and the execution of the connected or ancillary activities that are performed under the Capacity Agreement.

Certify the availability of LNG carriers approved for the unloading at the Terminal or undertake to deliver the LNG through LNG carriers compatible with the specification set forth in the Technical Manuals.

The regasification capacity, whether it is offered at the beginning or during the gas year,

is allocated through auctions: the continuous capacity is allocated on ascending clock

basis whilst infra-annual on pay-as-bid basis and the reserve price criteria are set forth by

ARERA with resolution 308/2018/R/gas and subsequent amendments.

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The continuous capacity means the regasification capacity offered at the beginning of a

gas year for a period of one or more gas year.

In each gas year, the regasification capacity, expressed in liqm3/year, available for

allocation is equal to:

• capacity available following the previous multiyear allocation processes;

• capacity released by continuous capacity users on annual and/or multiyear basis;

• capacity made available due to use it or lose it criteria.

The continuous capacity, allocated on ascending clock basis, is offered in two different moments:

• the first allocation process concerns, in fact, capacity products, that are products consisting in one or more years from the 6th to the 15th year following the year of the allocation, identified basing on the expression of interest sent by users. This product is thought to meet the specific needs of users with long term supply contract.

• afterwards the next allocation process concerns regasification available from the 1st

up to the 15th year following the year of the allocation, the users can bid gas year per gas year.

ALLOCATION OF CONTINUOUS CAPACITY AT THE BEGINNING OF THE GAS YEAR

5.1

Each applicant submits its bid through the relevant Platform for the Allocation of

Regasification Capacity (PAR) organised and operated by Gestore Mercati Elettrici on

which the applicant shall be enabled to operate.

In order to submit its bid, in fact, each applicant that meets the service conditions shall:

• sign the capacity agreement;

• provide the relevant financial guarantees;

• be enabled to operate on the PAR;

within deadlines, time and in accordance with the procedures set forth in the Regasification Code.

At the end of each allocation process, the Annual Unloading Schedule and the Ninety Days Unloading Schedule are updated and published by OLT on its website.

OLT FSRU Toscana

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ALLOCATION OF CAPACITY PRODUCTS DURING THE GAS YEAR

5.2

01/03OLT

publishes long-term capacity

+6y/+15y

By 01/04Users submit expressions

of interes+6y/+15y

30/04OLT publishes

capacity products for

+6y/+15y

By 28/05Users submit 1/3 guarantee and relevant

contract

01/06Auction and

allocation of capacity products

10/06OLT

publishes monthly slots

for +1y

10/06OLT

publishes long term

capacity from +2y/15y

01/07Auction and allocation of annual and multiyear capacity

By 28/06Users submit 1/3 guarantee and relevant

contract

From 01/07For the incoming

gas year only users choose the

monthly slots

OLT offers one or more capacity products consisting in one delivery slot for each month

following the month on which the capacity products have been offered until the end of

the gas year.

The reserve price for the capacity products will be equal to the average of the reserve

prices of each month, calculated as per Resolution 308/2018/R/Gas.

Each applicant submits its bid through the relevant regasification auction platform

organised and operated by Gestore Mercati Elettrici.

In order to submit its bid, in fact, each applicant that meets the service conditions shall:

• sign the capacity agreement;

• provide the relevant financial guarantees;

• be enabled to operate on the regasification auction platform;

within deadlines, time and in accordance with the procedure published on OLT company website.

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ALLOCATION OF CAPACITY DURING THE GAS YEAR

5.3

During the gas year OLT publishes the regasification capacity still available for allocation

in such gas year.

In each allocation process, the available capacity is equal to:

• primary capacity, that is the regasification capacity still available following the previous allocation processes;

• secondary capacity, that is the regasification capacity released by the users.

The allocation processes the regasification capacity is offered in, during the gas year, are;

• Monthly auction: at the beginning of each month the regasification capacity available is offered from the following month till the end of the gas year, e.g. in September the regasification capacity is offered from October 2018 up to September 2019. The regasification capacity is allocated on pay-as bid basis;

• Spot auction: in each month the regasification capacity remained available after the monthly auction is therefore offered again during the same month. The regasification capacity is allocated on pay-as bid basis;

• First Come First Served (FCFS): following each spot auction, and in order to maximize the regasification capacity allocation, the regasification capacity potentially still available after spot auction is further offered on FCFS basis.

By +2wdOLT publishes slot from M to the end of the current

gas year

forthcoming quarter with a data associated to each

delivery slot

By +4wdOLT publishes

capacity for FCFS

(S3M-1, S4M-1)

From +5wd H 09:00 +7wd H

14:30 Request and allocation of

FCFS capacity (S3M-1, S4M-1)

By 10wdH 12:00

Users submit quarter guarantee

and relevant contract

By +13wdOLT publishes

capacity for FCFS

(S1M, S2M)

By 1wdH 12:00

Users submit quarter

guarantee and relevant

contract

By +3wdH 14:30

Auction and allocation of

capacity(S3M-1, S4M-1)

By +4wdH 12:00

Users submit quarter

guarantee and relevant

contract

By +6wdH 14:30

Auction and allocation of

capacity

By +8wdOLT

publishes slot for spot

(S1M, S2M, S3M S4M)

By +12wdH 14:30

Spot Auction and allocation of

capacity (S1M, S2M

(S3M S4M)

From+14wdH 09:00 to +16wd H

14:30Request and allocation of

FCFS capacity (S1M, S2M)

By -2wdOLT publishes slot for spot

(S3M S4M)

MONTH M-1 MONTH M

S1M-1 S2M-1 S3M-1 S4M-1 S1M S2M S3M S4M S1M+1

wd working day

SXY slot number X per month Y

OLT FSRU Toscana

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The users, pursuant to provisions, time and deadlines set forth in the Regasification

Code, can transfer, release or exchange their capacity.

Regasification capacity transferBefore the beginning of a gas year or during the latter, a user may transfer part of the

regasification capacity hold under a Capacity Agreement to another user, transferring all

the rights and obligations associated with such regasification capacity.

Regasification capacity releaseBefore the beginning of a gas year or during the latter, a user may release part of the

regasification capacity hold under a Capacity Agreement. Once released, such capacity

is offered during the relevant allocation procedure as secondary capacity and the rights

and the obligations associated with such regasification capacity remain with the releasee

unless it is awarded to another user.

Regasification capacity exchangeBefore the beginning of a gas year or during the latter, the users are entitled to exchange

the regasification capacity respectively hold, including all the rights and obligation

connected with the exchanged capacity.

CAPACITY TRANSACTIONS

CAPACITY AGREEMENT AND CREDIT REQUIREMENTS

5.4

5.5

In order to participate to each regasification capacity auction the user shall preliminary

have signed a capacity agreement and provided adequate financial guarantees.

The Capacity Agreement is a framework agreement between OLT and the user, that

becomes effective once the regasification capacity is awarded to the user only.

The financial guarantees shall cover 1/3 of the obligations arising from the regasification

capacity awarding, for annual and multiyear allocation processes, and during the gas

year all the obligations arising from the regasification capacity allocated in the next six

months.

The financial guarantees can be covered through:

• credit rating for unsecured long-term debt (equal or higher to Baa3 given by Moody’s or BBB- given by Standard&Poor’s or BBB given by Fitch);

• bank guarantee;

• a not interest-bearing security deposit.

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In case the credit rating is fulfilled by an affiliate of the user, the latter can provide a parent company guarantee expressing the guarantor’s undertaking to meet the obligations under the Capacity Agreement.

6 Regasification programmeBORROWING AND LENDING PRINCIPLE6.1

OLT allocates to each user, on a provisional basis, the energy of each cargo expected

to be unloaded in each Delivery Slot scheduled to be unloaded during the months the

Ninety Day Unloading Schedule refers to, basing on the percentage shared of each user

with entitlements on these three months. Each user hence shares inventory and LNG

with each other users, so giving users the flexibility to redeliver its cargo in a longer

period than the one strictly necessary to discharge and regasify its own cargo.

Before each cargo scheduled in a relevant redelivery period is brought to the Terminal,

OLT, in the name and on behalf of each borrowing user, registers a sales transaction at

the virtual exchange point (PSV) in favour of each lending user, whose quantity is equal

to the debit position of each of them.

OLT FSRU Toscana

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Storage

SLOT 01

135,000

120,000

75,000

0SLOT 02 SLOT 03 SLOT 04 SLOT 05

Redelivery rate on firm services

0

USER A

USER B

USER C

Figure 6-1A

Borrowing and

lending model

Without borrowing & lending Each user has a flat redelivery

profile calculated so to clear the

storage before the next cargo

arrives.

Confirmed Cargo

SLOT 01

135,000

120,000

75,000

0SLOT 02 SLOT 03 SLOT 04 SLOT 05

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USER A

USER B

USER C

With borrowing & lending Each user shares part of its

inventory and of its LNG with the

other users, regulating its own

send-out during all the redelivery

period.

Figure 6-1B

Borrowing and

lending model Percentage share

of USER A

Percentage share

of USER B

Percentage share

of USER C

45% 35% 20%

SLOT 01

135,000

120,000

75,000

0SLOT 02 SLOT 03 SLOT 04 SLOT 05

Confirmed Cargo

0

Storage

Redelivery rate on firm services

SLOT 01 SLOT 02 SLOT 03 SLOT 04 SLOT 05

100%

55%

20%

0

In the event a user is awarded a Delivery Slot when the redelivery period is commenced,

the percentage share of each user with a cargo scheduled in that redelivery period will

be properly recalculated.

OLT FSRU Toscana

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Users can modulate their redelivery profile within technical regasification limits (about

0.3/15.0 million of cubic meters per day interruptible services included) and their own

availability of LNG: it means the users have the flexibility to define the profile with which

their LNG is regasified and redelivered at the entry point.

On a daily basis all the Terminal users can nominate in excess to its own firm capacity any

available interruptible services as per article 3.2 above.

REDELIVERY PROFILE FLEXIBILITY6.2

Redelivery rateFigure 6-2

Flexible redelivery

USER A

USER B

USER CSLOT 01

flat profileSLOT 01

flexible profile

MAX

FIRM

MIN

DEFAULT

COMMERCIAL SERVICES

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OLT FSRU Toscana

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All users contribute to ensure the Terminal full operational so guaranteeing the

regasification services:

Minimum Redelivery Obligation: aggregated minimum quantity, equal to 4,450 MWh/day,

each user shall at least nominate/renominate, or will be deemed to have nominate/renominate,

pro rata based on its percentage share. A user can be excused from such obligation to the

extent that the nominations/renominations of the other users exceed the minimum redelivery

obligation.

Minimum Inventory: an aggregated volume equal to 41,625 MWh each continuous

capacity user shall maintain into the Terminal, proportionally to the continuous capacity

of each continuous capacity user on the total continuous capacity allocated in the

relevant gas year.

Consumptions and losses: OLT allocates to each user a quantity of LNG and/or gas

destined to be used by OLT as fuel for the basic operation of the Terminal and for the

regasification service during the unloading. Such quantity is expressed as a percentage

– approved by ARERA and published by OLT on the company web site – of the actual

quantity unloaded by the user at the Terminal.

OPERATIONAL OBLIGATIONS6.3

COMMERCIAL SERVICES

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User can submit and modify its nomination both on day ahead and on intraday basis

(hours are CET including DST).

7 Nominations and renominations

Figure 7-1

Nomination and

renomination

processes

Redelivery Nomination

(day ahead)

1st session

Redelivery Nomination

(day ahead)

2nd session

Redelivery Renomination

(intra-day)

by 11:00

Users submittheir

nomination

12:30

Users can modifytheir nominations

if notaccepted

by 12:00

OLT notifiesnomination

approval

12:30

OLT notifies the approvednomination

by 18:30

Users can submittheir

nomination

by 15:00

Users can submittheir

renomination

19:30

Users can modifytheir nominations

if notaccepted

16:00

Users can modifytheir renominations

if notaccepted

by 19:00

OLT notifiesnomination

approval

by 15:30

OLT notifiesrenomination

approval

19:30

OLT notifies the approved

nomination

16:00

OLT notifies the approvedrenomination

Provided that the users have collectively nominated a quantity of gas not less than 46,300

MWh, for a certain gas day, the users may renominate assuming that, in the first twelve

hours of the current gas day, OLT redelivered them half of the volumes the users nominated

through day-ahead nomination.

OLT FSRU Toscana

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COMMERCIAL SERVICES

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OLT FSRU Toscana

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This document sets forth certain information regarding the regasification facilities and

services offered by OLT Terminal. Please note that the document can be amended from

time to time pursuant to the Regasification Code. In each case OLT disclaims any and all

responsibility for changes of the services herein described that may be as result of, inter alia,

regulatory constrains defined by the relevant regulatory authority or may be imposed by

Italian or European authorities.

The information herein contained should not be considered to give rise to any contractual

relationship between OLT (or any of its affiliates entities) and any interested party.

Disclaimer

IMPAGINAZIONE GRAFICA

Extra Comunicazione e Marketing

STAMPA

Mediaprint - Livorno

FINITO DI STAMPARE

Settembre 2018

OLT Offshore LNG Toscana S.p.A.Sede Legale: Via Passione, 8

20122 Milano - ITALY

TEL +39 0586 51.94.1

FAX + 39 0586 21.09.22

E-mail info@oltoffshore.it

PEC oltoffshore@legalmail.it

oltoffshore.it